In unusually strong terms, the Düsseldorf Administrative Court has rejected a claim for the repayment of coronavirus aid. The authorities had demanded the repayment of around 75,000 euros on the grounds that crosses in a submitted document were allegedly illegible. The court described the action as arbitrary and vexatious. The ruling highlights the absurd lengths to which the practice of demanding repayment has now gone – and why those affected should fight back.
75,000 euros refunded due to allegedly illegible ticks
A drinks wholesaler received around 75,000 euros in Bridging Aid III in 2021. In September 2024, he submitted the required final statement via his tax adviser. The relevant district authority then objected that the ticks marked on the attached form were allegedly illegible and requested that it be resubmitted.
After the queries remained unanswered, the authority rejected the grant in its entirety and demanded the return of the full 75,000 euros.
The entrepreneur took legal action – and won. The Düsseldorf Administrative Court quashed the final decision and ordered the authority to reconsider the grant application (court ruling of 27 March 2026 – 16 K 1342/26).
Enquiries are permitted – harassment is not
First and foremost, there is nothing wrong with reviewing coronavirus aid that has already been granted. Bridging aid was regularly approved and paid out on a provisional basis initially. As part of the final settlement, the approving bodies check whether the eligibility criteria were actually met and what the final amount of funding to which the recipient is entitled is.
To this end, the authorities may request documents, ask questions and, in the absence of cooperation, decide on the basis of the available file where necessary. After all, this involves public funds, the use of which must be scrutinised.
However, this does not mean that the authorities may impose arbitrary requirements and subsequently use non-compliance as grounds for a claim for repayment.
This is precisely what seems to be increasingly lost sight of in practice.
We represent numerous companies across Germany in recovery proceedings and repeatedly witness just how absurd the authorities’ scrutiny has become. Not only are the enquiries numerous, but they often entail a considerable burden for the companies concerned and their tax advisers.
Documents are requested that clearly do not exist or could never have existed. Enquiries are made whose relevance to the specific grant case is not apparent, even when viewed in the best possible light. Companies are being asked to submit hygiene plans from 2020, six years after the start of the pandemic. Elsewhere, documents that have already been submitted must be uploaded again because a tick is missing or a formal discrepancy has been flagged.
Each of these enquiries triggers further work. Old documents must be tracked down, former employees contacted and business transactions long since concluded reconstructed. Added to this are the costs of the tax advisers who have to oversee the process.
And it is not uncommon for the process to culminate in a threat to reclaim the entire grant should there be insufficient cooperation.
The Administrative Court uses unusually strong language
We have already criticised the granting authorities’ practice of reclaiming funding on several occasions. However, in its ruling, the Düsseldorf Administrative Court goes significantly further.
On the basis of the administrative file, it found that the allegedly illegible declarations, including all the ticks, were in fact easily legible. The repeated request was therefore simply unnecessary.
The court’s reasoning is remarkably clear:
‘The rejection is arbitrary, as the requests for further information were unnecessary.’
The court found that the document was legible word for word. It went even further, describing the authorities’ enquiries from the perspective of the person concerned as “at the very least harassment”, if not an “inept attempt to fabricate an irrelevant ground for rejection”.
It is also noteworthy that, according to the court’s findings, the authority did not even respond to the judge’s observation and failed to justify its actions.
These are unusually strong words for an administrative court. They make it clear that even when awarding voluntary state grants, there are limits. Whilst the granting authorities do have considerable discretion in applying their funding guidelines, this discretion ends where decisions can no longer be objectively justified and contravene the prohibition of arbitrariness under Article 3(1) of the Basic Law.
An authority may not use a lack of cooperation as a pretext for a recovery order if the cooperation demanded was unnecessary from the outset.
A practice of recovery lacking a sense of proportion
The Düsseldorf case is particularly drastic, but the underlying problem is by no means unusual.
The authorities responsible for reclaiming funds often take a mercilessly strict approach. Whilst the approval of aid during the pandemic took place under considerable time pressure and on the basis of guidelines that were, in some cases, unclear, errors are now being sought out with almost pedantic precision. Even the slightest formal discrepancies can become the basis for a full recovery of funds.
In doing so, the real issue sometimes seems to be lost sight of: the COVID-19 aid was intended to help businesses through an exceptional economic situation. The final settlement is intended to determine whether, and to what extent, this aid was justified. It is not an end in itself, and certainly not an opportunity to create additional grounds for recovery by imposing ever-new formal requirements.
Anyone who, years after a grant has been paid out, requests documents that are either already available or are clearly irrelevant to the funding decision must face the question of whether this is actually still a matter of proper scrutiny.
For small and medium-sized enterprises in particular, this practice is almost impossible to comprehend. They are forced to devote considerable resources to reviewing matters dating back years, whilst at the same time facing recovery claims that could jeopardise their very existence.
Conclusion: Do not accept recovery claims without scrutiny
The ruling by the Düsseldorf Administrative Court shows that the authorities’ scrutiny of coronavirus aid is not unlimited. Even a general obligation to cooperate does not justify arbitrary demands. And not every unanswered enquiry justifies the full recovery of funding that has already been paid out.
Although the court did not immediately grant the company in question final approval of the 75,000 euros, it did overturn the previous rejection and obliged the authority to make a new decision.
This sends an important signal to affected companies. A notice of recovery is not lawful simply because an official enquiry has gone unanswered or documents are allegedly missing. What is decisive, rather, is whether the information requested was necessary at all and whether the authority drew legally permissible conclusions from it.
In our advisory practice, we repeatedly find that recovery notices are based on questionable factual or legal assumptions. Not every recovery notice can be prevented. However, the Düsseldorf case impressively demonstrates that it is worthwhile to have the arguments put forward by the granting authorities critically reviewed and to defend oneself against unlawful decisions.
Companies facing claims for the repayment of COVID-19 aid should therefore have their legal options assessed at an early stage – ideally as early as the hearing or final settlement proceedings.